Published on: Jun 29, 2020
As the country moves into month five of the 2020 COVID recession, 39.4% of job seekers report they believe it will last ten to 12 months, 24.2% say it will last more than one year, and another 9% believe it will last roughly two years, according to a new survey released Monday from global outplacement and executive and business coaching firm Challenger, Gray & Christmas, Inc.
The survey was conducted online among 112 job seekers during the firm’s free Job Search Webinars offered to the public the week of June 15.
“Economists are increasingly uncertain of when the recession may end, especially with questions surrounding a vaccine and with the recent spikes in cases in states that have reopened. Consumer confidence may continue to wane due to increased illnesses. Meanwhile, the Services sector, which has bolstered the economy during past recessions, is the hardest hit this time around,” said Andrew Challenger, Senior VP of Challenger, Gray & Christmas, Inc.
Of those who responded, 75.6% were unemployed, with 36.4% reporting they lost jobs directly due to the pandemic. Another one-fourth of the remaining 24% reported they were underemployed. The majority (56%) have been out of work for one to two months.
The majority (63%) believe it will take between one and six months to find work, with 42% of those respondents saying they believe it will take four to six months to find another position. Another 38% said it will likely take seven to 12 months.
Job seeker confidence is a bit higher and less uncertain than what Challenger tracked during the recession years. In 2008, 26% of job seekers did not know when they would find their next position. Another 12% said it could take seven to ten months to find a new position, and 5.5% reported it could take longer than ten months.
“19.5 million Americans are receiving unemployment benefits, down only slightly from peak claims, suggesting companies are slow to return workers to their jobs. This also suggests these workers may not get those jobs back,” said Challenger.
Meanwhile, job cut announcements by U.S.-based employers as tracked by Challenger fell in May to 397,016, the second-highest total on record after April 2020’s total of 671,129. So far this year, 1,414,828 job cuts have been announced, 542,048 cuts away from the 1,956,876 cuts announced in 2001, the highest annual total on record. The hardest hit industries are Entertainment/Leisure, including hotels, bars, and restaurants; Retail establishments; and Services firms.
Job cuts have already begun to spread outside these initial sectors, according to Challenger. For instance, Tech has seen a 186% increase in layoffs, to 53,072, through May 2020, from 18,568 during the same time last year. The Health Care sector, including hospitals, has announced 45,430 job cuts through May, up 159% from the 17,514 announced last year. As donations have dried up, the Non-Profit sector cut 44,106 jobs through May, up 3,196% from the 1,338 cuts announced in the same period last year.
“The next employment report will give us a clue as to whether companies are adding jobs or seemingly recalling workers and at what pace. As governors roll back reopening plans amid spikes in cases, we will likely see an increase in jobless claims,” said Challenger.